19 August 2017

A public interest litigation was also filed in the Patna High Court on Wednesday by advocate Manibhusan Pratap, seeking a CBI probe into the scam. After days of investigation, a Special Investigation Team said crores were diverted

SIT officials said an FIR was lodged against board members of the NGO and officials of Indian Bank in connection with fraudulent withdrawal of Rs 10.26 crore fund of the Mukhyamantri Shahari Vikas Yojana. Two more FIRs were lodged in connection with fraudulent withdrawal of funds of the Land Acquisition Department.

eight people have been arrested, including Prem Kumar, an aide of the Bhagalpur District Magistrate, in connection with the scam. On Monday, three more persons in connection with the NGO scam were arrested taking the total arrests to 11, as per Indian Express.

The NGO allegedly carried out this fraud for a period of 7 years between 2007 and 2014. Its operations were hit last year after the death of its founder Manorama Devi in February.

Bhagalpur-based Srijan has been accused of swindling more than Rs 1500 crore in collusion with top government officials including the state’s deputy chief minister, Sushil Kumar Modi.

government money was allegedly siphoned off by the and some public-sector banks with government officials also being named suspects.

The cases were being investigated by the economic offences unit (EOU) of the Bihar Police. The state police issued a lookout notice against secretary of the accused NGO, ‘Srijan’ and her husband for allegedly swindling over Rs 1500 crore of government money in Bhagalpur.

Additional Director General of Police (Headquarters) S K Singhal told media that “The lookout notice against NGO secretary Priya Kumar and her husband Amit Kumar has been sent to all airports of the country to prevent them from leaving the country,”Singhal said that the bank account of the wife of arrested District Welfare Officer Arun Kumar has been frozen in Bhagalpur.Officials said during a raid, over Rs 1.50 crore was allegedly found deposited in that account.

Who are Priya Kumar and Amit Kumar?Priya Kumar is the daughter-in-law of Manorama Devi, the founder of the NGO. Manorama Devi died early this year after which the NGO was being run by Priya Kumar and Amit Kumar, son of Manorama Devi.Amit Kumar and daughter-in-law Priya Kumar have been arrested.

What is Srijan scam?How Srijan scam happened?

The scam is about alleged transfer of government funds to an NGO Srijan Mahila Sahyog Samiti in Bihar’s district Bhagalpur. The NGO used to earn a high rate of interest on the government funds while keeping the principal amount intact. It is believed the ambit of the case may go beyond Bhagalpur to other districts of the state.

The NGO carried out this fraud for a period of 7 years between 2007 and 2014.

The NGO would accept government’s financial assistance in the guise of creating jobs for local women by engaging them in Sari making handloom. But, fresh evidence reveals that the handloom only existed on paper and the NGO essentially imported Saris from other parts of India and repackaged them at their centre in Bhagalpur.

According to the report, the NGO was working in cahoots with bankers and treasury officials to secretly divert government funds into its account and earn interest on the principal amount, while leaving it as it is. For this, the NGO used to write its account number on the reverse side of cheques issued by district treasuries to several government departments. The scamsters had also developed a system to generate fake e-statement of the bank to avoid getting caught. These fake statements were regularly sent to government offices for record keeping.Moreover, the NGO also used to allegedly offer loans to people at very high rates of interest.

The NGO also prepared fake passbooks and escaped government audit between 2007-14, according to HT. The investigators have seized the laptop, which was used for running the fake banking software, printer, pen drives and alleged copies of bank e-statements

According to IE, the government funds were apparently transferred to Srijan’s accounts in Bhagalpur branch of Indian Bank and branches of Bank of Baroda.

A senior police officer explained the Modus Operandi to The Telegraph like this: When the district magistrate used to issue cheque to the bank concerned to transfer funds from the treasury, staff member in his office used to stamp a fake signature at the back of the cheque with instruction to deposit the money in the NGO’s account. The officer told the daily that when the DM issued a new cheque for government expenses, the money was sent back to the account of the district administration from Srijan’s account. This is how the DM’s cheque never bounced and no body noticed the fraud. Further, the NGO also used to print fake e-statements at its office and provide to the DM’s office when required.

The SIT, headed by Gangwar, detected gross irregularities in the transfer of government funds to the account of the NGO. At least eight district magistrates (DMs), who have served in Bhagalpur since 2007, were on the radar of the SIT

The SIT also detected that crores of government money were transferred from the bank accounts of different departments, including Mukhyamantri Shahari Vikas Yojna in Bhagalpur district, with the help of NGO Srijan Sahayog Mahila Vikas Samiti.

Sushil Modi was the finance minister in the state between 2005 to 2013.Bihar’s Leader of Opposition Tejashwi Yadav on Thursday demanded that Modi’s role be probed because government funds were transferred to private accounts between 2005 and 2013.

Nitish Kumar has ruled the state since 2005, while Modi was the state finance minister for most of the time when the alleged fraud took place.

On Thursday, Lalu leveled allegations against Kumar, BJP leaders Sushil Modi, Shahnawaz Hussain, Giriraj Kishore, Nishikant Dubey and Vipin Bihari. Lalu alleged that Nitish has joined hands with BJP to save himself from the probe into the scam.

Few media reports said scam is worth Rs. 700 Cr. few said Scam amount is Rs. 1000 Cr. And few said Scam amount is Rs. 1500 Crore.

According to IANS, the scam could be worth over Rs 1000-crore, while The Indian Express reported on August 15 that the scam is suspected to be worth over Rs 700 crore.